Paspa Explained - Overturned By The Supreme Court

The Professional and Amateur Sports Protection Act of 1992, commonly called PASPA, is a prominent federal US sports betting law that makes it illegal for most states to allow commercial or tribal sports betting. Also known as the Bradley Act, PASPA was sold to the states as a means to prevent interstate organized crime, while the public was sold some silly rhetoric about preserving the “integrity” and competitive “fairness” of professional and collegiate athletics. Of course, this morality only went so far. Sin City was exempt.

Actually, four states are exempt from PASPA: Delaware, Nevada, Montana, and Oregon. The US sports betting law has a so-called “grandfather clause” that allowed any state with an existing sports betting industry to continue offering any services that were in effect at the time of PASPA’s January 1, 1993, effective start date. For whatever reason, Nevada is the only one of these four to offer a comprehensive sportsbook menu, although Delaware does allow NFL parlay bets.

Most US sports betting laws (and gambling laws in general) are fraudulent, anti-rights reactionary nonsense. That much is clear. But PASPA has a particularly amusing origin: New Jersey senator Bill Bradley had the idea for a scheme to essentially give his state – home to Atlantic City, the largest casino town after Las Vegas – an east coast monopoly on legal sports betting. He did this by working an exception or “carve out” into the federal gambling law for any state with a history of at least 10 years of uninterrupted casino operation at the time of PASPA’s inception. That “any state” was New Jersey. And like all things New Jersey, they dropped the ball.

The Effect Of PASPA On The US Gambling Industry

PASPA has been a disaster since day one. The effect of PASPA on the US gambling industry has been ruinous, and its effect on the American economy has been even worse. Sports betting is the largest segment of the gambling industry worldwide. The money that folks spend on the pastime – some $500 billion per year in America alone – dwarfs all poker, table games, and horse racing betting combined. It even outpaces the combined totals of all state lotteries. In other words, it’s the one type of betting that everyone wants.

So instead of spending their money in their home states to help their local economies, sports bettors are avoiding PASPA by flocking to where sports betting is legal, and they’re sending all of their money overseas. And no, not all of it comes back. Not even close. If the onerous US sports betting law is eliminated, legal sports betting in the US could generate billions of dollars in yearly infrastructure, cut overall state tax rates, and employ hundreds of thousands of people nationwide.

PASPA Is Being Challenged In Court

To its credit, New Jersey quickly came to its senses and challenged PASPA in court. Several angles of attack have been presented and rejected, but lately, the state has mounted a promising assault on the unconstitutional US sports betting law in the federal court system.

To that end, New Jersey has finally convinced the Supreme Court to take up their challenge of the constitutionality of PASPA. It’s a pretty simple argument: PASPA is unconstitutional and unlawful because it violates the mandates of the Equal Sovereignty Doctrine which guarantees equal application of federal law to all states in the union. Obviously, a law that applies only to certain states but not others is a blatant infringement of not just the letter but also the spirit of that doctrine.

New Jersey is also challenging PASPA on grounds that it gives regulatory authority to non-government entities. Those entities are the longtime adversaries of New Jersey’s legal sports betting push: the major US sports leagues. Under the so-called Nondelegation Doctrine, it is unlawful and unconstitutional for the government to authorize private organizations to carry out or exercise laws for which it nominally has responsibility. Since it has been the NFL, NBA, MLB, NHL, and NCAA working in concert to quash all of New Jersey’s past PASPA challenges (and not any government agency), these monopolies clearly wield executive power over US law, which is illegal.

How To Repeal PASPA: The GAME Act

Another front of New Jersey’s PASPA strategy involves passing new, comprehensive legislation to repeal the US sports betting law. The Gaming Accountability and Modernization Act, or GAME Act, has been proposed by New Jersey representative Frank Pallone (D), and it seeks to repeal PASPA by removing any federal restriction on the states to establish their own regulated, legal sports betting industries. Whether or not the proposal will garner enough legislative support to eliminate PASPA remains unclear, as does the bill’s future in the event that the Supreme Court invalidates PASPA altogether.

Why The NBA Doesn’t Support PASPA Anymore

David Stern, past commissioner of the NBA, was instrumental in getting PASPA enacted as the de facto US sports betting law. He viewed the matter as pertinent to his league, which, as an interstate business, meant it was pertinent to federal authorities. He believed legal sports betting to present an immediate threat, that it was corruptive to the NBA, and that it led to higher crime rates.

Fortunately, Stern’s successor, NBA commissioner Adam Silver, has a diametrically opposed – and incredibly outspoken – view. He knows that sports fans bet on the NBA (and other leagues) regardless of the law, and he believes that the legalization and regulation of sports betting would make his clubs and athletes much wealthier while simultaneously reducing the avenues for game-fixing fraud. He’s right, of course.

How To Enjoy Legal Sports Betting Without Violating PASPA

Until PASPA is overturned or repealed, it will remain illegal to bet on sports in most of the US. However, you can freely bet on sports outside of the US without breaking any laws by using online sportsbooks. USA online sportsbooks offer legal sports betting without any of the hurdles or headaches that PASPA has put on US-based casinos and bookmakers.

Since PASPA only goes after people and companies that accept bets (and not those individuals who place bets), online sportsbooks are able to sidestep established US sports betting law and provide legal sports wagering to US residents. They can do this because they are all offshore entities. As such, they aren’t operating under the purview or authority of the US legal system, and they’re fully licensed and regulated in their home countries. Ironically, gambling at reputable online sportsbooks like Bovada, BetOnline, SportsBetting, and 5Dimes is so easy and enjoyable that there’s a good chance the US may never recoup all the lost income potential that PASPA’s caused over the last 25 years.

Perhaps those businesses will open domestic offices and “transfer” their US customers back to the country, but it will be a long time before any significant majority of states makes sports betting legal. So even if PASPA is nixed, you’ll probably still want to use an offshore, online sportsbook for the foreseeable future.